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NAFCU’s Kaley Schafer offered support for defining an overall “effective and reasonably” designed anti-money laundering (AML) program – including an explicit requirement for a risk-assessment – in a letter sent in response to the Financial Crimes Enforcement Network’s (FinCEN) advance notice of proposed rulemaking (ANPR) gathering public feedback on potential improvements to AML programs. However, Schafer noted that the risk-assessment should not require national AML priorities due to the increased compliance burdens and voiced several additional recommendations.

The ANPR was issued in September, in conjunction with a final rule to remove an AML program exemption for certain banks that lack a federal function regulator.

“In addition to defining an effective and reasonably designed AML program, FinCEN should consider changes to existing mechanisms, such as the information-sharing programs, suspicious activity reports (SARs), and currency transaction reports (CTRs) to increase overall AML effectiveness,” wrote Schafer, NAFCU’s senior regulatory affairs counsel.

On information sharing programs, Schafer noted that NAFCU agrees with the Bank Secrecy Act Advisory Group (BSAAG) recommendation to enhance information-sharing among financial institutions, regulators and law enforcement through partnerships and other existing mechanisms.

On SAR reform, Schafer again expressed an agreement with the BSAAG’s recommendation to support the possibility of a streamlined SAR for continuing activity. Adoption of a simplified SAR form for the purposes of continuous SAR filings will “reduce compliance burdens as the initial SAR filing provides all the necessary information,” Schafer noted.

On CTR reform, Schafer voiced support a CTR threshold increase or indexing to inflation to better capture suspicious transactions.

In addition to these recommendations, Schafer requested that FinCEN provide an implementation period or compliance date for credit unions to incorporate the priorities.

For more on this topic, read Schafer’s full letter and view NAFCU’s Regulatory Alert on the ANPR; sign up to receive Regulatory Alerts in your inbox.

BSA/AML reform is one of NAFCU's advocacy priorities for 2020, and the association has urged Congress to enact BSA/AML legislation to reduce regulatory burdens, including those related to suspicious activity report (SAR) and currency transaction report (CTR) filings.

BSA/AML compliance is also one of the NCUA’s 2020 supervisory priorities; earlier this year, the agency issued an exemption for certain loans made by credit unions from customer identification program requirements.